SAP Solution Brief
SAP for Retail
SAP Forecasting and Replenishment for Retail
Objectives
Solution
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Meet Shopper Demand by
Optimizing Inventory Availability
While Reducing Cost
Benefits
Quick Facts
Objectives
Solution
Benefits
Quick Facts
Respond quickly to changes in
consumer demand
Respond quickly to changes in consumer
demand
In a fast-paced world, consumers have access to products at all times
across all channels. Successful retail companies meet these demands by
replenishing emptying shelves promptly while avoiding product overstock.
One of their secrets is the SAP® Forecasting and Replenishment for Retail
application, which helps them meet shopper demand while reducing costs.
As an experienced retailer, you gain consumer
loyalty by predicting consumer demand accurately with relevant factors and trends incorporated into your forecasting. You use those
numbers in your automated replenishment
planning, integrated at every level of your
supply chain. This helps you reduce logistics
costs and optimize inventory. You’ve eliminated
manual routine work and freed up resources for
value-adding activities. You maintain control
of inventory levels, assortment, and availability
while meeting consumer demand, reducing
order cost, and minimizing effort.
You know your competitors are battling with
fragmented supply chains and poor collaboration while you lead the field. Your stock-intrade is SAP Forecasting and Replenishment
for Retail, an application that lets you anticipate market changes and respond promptly
with in-depth insight into your shoppers,
what they want now, and what they’ll want
tomorrow. What’s more, you’re ready to offer
just that. See the figure on the next page.
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Objectives
Respond quickly to changes in consumer
demand
Solution
Benefits
Quick Facts
Replenishment
calculation
Inventory
optimization
Order proposal
management
Causal-based
forecast
Demand
forecast and
planning
Advanced
safety-stock
concept
Order
consolidation
and splitting
Right mix of
advanced
science and
robust
functionality
Store and
distribution
center
replenishment
Consideration
of multiple
supplier
restrictions
Flexible order
review and
release
management
Adoption of
retail volumes
Multilevel
replenishment
Inventorybalancing
methods
Order transfer
to SAP for Retail
or non-SAP
merchandising
software
Demand
forecast
Add-on
available for
fresh foods
Recent
innovation
Business
analytics
Reports on:
Forecasting
quality
Inventory
evolution
Out of stock and
lost sales
Forecasting and automated replenishment of
ultrafresh products like vegetables, fruits,
meat, fish, and delicatessen foods
Figure: Building blocks of the SAP Forecasting and Replenishment for Retail application
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Objectives
Solution
Benefits
Quick Facts
Increase forecasting accuracy
Increase forecasting accuracy
Automate multilevel replenishment
calculations
Optimize your inventory
Maintain transparency to tighten control
Plan better for fresh products
Like most retailers today, your product assortment is varied and diverse. To forecast
demand, you must track millions of products
along individual sales patterns and examine a
multitude of factors. SAP Forecasting and
Replenishment for Retail simplifies this
process for you.
Sophisticated forecasting algorithms fed
with data from store and SKU levels aid you
in predicting customer demand. Advanced
modeling techniques can incorporate demandinfluencing factors, such as promotions,
events, price, and even weather. With support
to forecast products in the tens of millions,
you spend a fraction of the time you used to
on manual planning activities. The software
can select the best-suited forecasting algorithms based on a product’s selling history.
Critical situations, such as significant sales
deviations or distortions resulting from out
of stock conditions, are corrected automatically. With flexible, state-of-the-art exception
management, your staff is alerted to intervene
only when exceptions are relevant to the
business.
Deliver the right products to the right locations in
the right quantity, offer an exceptional customer
experience, and watch customer loyalty soar.
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Objectives
Solution
Benefits
Quick Facts
Automate multilevel replenishment
calculations
Increase forecasting accuracy
Automate multilevel replenishment
calculations
Optimize your inventory
Maintain transparency to tighten control
Plan better for fresh products
SAP Forecasting and Replenishment for
Retail applies the same level of precision and
automation to replenishment as it does to
forecasting, so you can automate and optimize store and distribution center processes.
Automated replenishment calculations mean
your associates can dedicate more time to
serving customers on the shop floor. The
solution can also determine the optimal order
quantity for each product in each location.
SAP Forecasting and Replenishment for
Retail demonstrates its full potential when
you integrate the different levels of your supply
chain to achieve multilevel replenishment. This
means you can roll up store order forecasts to
the distribution-center level and exchange
them with suppliers for collaborative planning,
forecasting, and replenishment. This makes
sustainable reduction possible all along the
supply chain – from production, transports,
and orders to delivery frequency – helping you
reduce your organization’s carbon footprint.
With multilevel replenishment, retailers can
synchronize all levels of the supply chain to
become truly demand driven.
Roll store-order forecasts up to the
distribution-center level to get the most
precise snapshot possible of future demand.
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Objectives
Solution
Benefits
Quick Facts
Optimize your inventory
Increase forecasting accuracy
Automate multilevel replenishment
calculations
Optimize your inventory
Maintain transparency to tighten control
Plan better for fresh products
To further optimize inventory, you want to fold
safety stocks and other sophisticated factors
in your replenishment calculations. SAP
Forecasting and Replenishment for Retail
helps you do that. By establishing safety-level
policies based on dynamically calculated safety
stocks, for example, you can respond to variances in the sales curve and adapt to demand
surges during promotional periods.
For tricky factors in the distribution network,
such as vendor restriction and full truckloads,
the software helps you strike a balance
between additional quantities and logistics
costs. Volume, weight, and stacking potential
are additional parameters the software considers to minimize negative impact on profitability
and merchandise flow efficiency. With features
to process advanced truckload optimization
and multiple supplier restrictions, the software
helps you draw up orders to load trucks that
minimize logistics costs. At peak times such as
Christmas, the application helps you distribute
truckloads over multiple periods to even out
the workload at the warehouse.
Get support to automate replenishment
based on a flexible safety-stock policy,
optimize truckload building, and ship
orders in economical quantities.
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Objectives
Solution
Benefits
Quick Facts
Maintain transparency to tighten
control
Increase forecasting accuracy
Automate multilevel replenishment
calculations
Optimize your inventory
Maintain transparency to tighten control
Plan better for fresh products
Order proposals generated by SAP Forecasting
and Replenishment for Retail can often be
released without any manual intervention,
thanks to the software’s accurate, transparent calculation steps. You can set up the software to reorder merchandise automatically,
with manual intervention as an option. With
the software’s workbenches, you can take
an exception-driven approach. You simply
review orders and, should reality strike in an
unforeseen way, adjust them prior to their
release. Manual intervention can be performed from a central location or on-site
through an intuitive, Web-based user
interface.
To manage retail inventory company-wide,
SAP Forecasting and Replenishment for Retail
– in conjunction with the SAP Business Warehouse application – gives you full visibility into
your supply chain based on powerful analytics. A complete range of intuitive, retail-specific
queries and reports supply useful information
to all internal and external stakeholders. Standard reports include out of stocks, lost sales,
overstocks and understocks, forecast quality,
and rate of adherence to customer-service
levels. You can monitor investments and
performance of all merchandise inventories
across your supply chain and exchange information about future demand with your suppliers
for better collaboration.
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Objectives
Solution
Benefits
Quick Facts
Plan better for fresh products
Increase forecasting accuracy
Automate multilevel replenishment
calculations
Optimize your inventory
Maintain transparency to tighten control
Plan better for fresh products
Fresh products are a crucial component for
grocery and convenience retailers in winning
and retaining customers. The quality of fresh
items looms large in a customer’s decision to
shop at your store or at the store next door.
Out of stocks and less-than-fresh produce
create a negative impression that can detrimentally affect the image of your entire company. But products that do not sell before the
shelf life has expired must be discarded, and
that can lead to costly write-offs and wasted
resources.
Highly volatile daily sales patterns and strong
seasonal influences make sales of fresh products difficult to predict. Very short shelf life
increases the complexity. Unexpected events,
changes in weather, or unexpected sales
trends can have a huge impact on a store’s
need to replenish vegetables, fruits, meat,
fish, and delicatessen foods. This calls for
extremely accurate daily forecasts as well
as fast reactions to unforeseen sales trends.
Avoiding waste is another consideration in
replenishment calculations for fresh products. You must know where write-offs are
likely to occur in order to calculate precise
order amounts.
The SAP Forecasting and Replenishment for
Retail‚ fresh product forecasting add-on,
makes it possible to succeed in this delicate
retail business, reducing waste while keeping
fresh products in stock for shoppers every day.
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
Objectives
Benefits
Solution
Quick Facts
Transform your business
Transform your business
SAP Forecasting and Replenishment for
Retail provides the tools your business needs
to improve replenishment, reshape the supply
chain, enhance customer experience, and run
a demand-driven supply chain. With optimized, synchronized replenishment plans,
your inventories can be reduced. By avoiding
out of stocks, you will see customer loyalty
and turnover increase. By automating processes, you free up your staff to focus on
the real value drivers for your business.
You can get up and running quickly by calling
on our implementation guidance service
for SAP Forecasting and Replenishment,
then fine-tune your configuration with our
what-if analysis deployment service for SAP
Forecasting and Replenishment to perfect
your settings. Available from SAP Consulting,
these services can help you throughout your
project. You can quantify the benefits of SAP
Forecasting and Replenishment for Retail
based on your company’s historical data even
before deployment with the proof-of-value
service for SAP Forecasting and Replenishment.
Explore different deployment options –
integrated with other SAP software or running as a stand-alone solution – to realize the
fastest return on investment. And simplify
your IT landscape by taking advantage of the
SAP HANA® Enterprise Cloud service. Select
the options and services that complement
your project road map, and realize the lowest
total cost of implementation possible.
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© 2015 SAP SE or an SAP affiliate company. All rights reserved.
www.sap.com
Objectives
Solution
Benefits
Summary
The SAP® Forecasting and Replenishment for
Retail application helps you accurately understand, predict, and maintain the delicate balance between inventory and customer service.
The software runs algorithms on transaction
data from other SAP and non-SAP applications to help you determine true customer
demand and optimal inventory availability at
all levels. Automated replenishment and ordering processes help you increase productivity
while reducing order and delivery costs.
Objectives
•• Sustain profitability in a competitive
environment
•• Retain customers as demand for variety,
quality, and value increases
•• Streamline supply chain operations with
fewer transports and less waste
Quick Facts
Solution
•• Sophisticated demand forecasting built for
retail volumes
•• Fully automated processes for both store
and distribution center replenishment
•• Multilevel replenishment functionality,
which synchronizes all the levels of your
supply chain
•• Better management of fresh items
•• Deployment options for best-price
implementation
Benefits
•• Greater product availability
•• Maximized sales through inventory levels
that match customer demand
•• Lower inventory levels and reduced waste
•• Increased staff productivity through management by exception
•• Reduced order and delivery costs
Learn more
To find out more, call your SAP representative
today or visit us online at
www.sap.com/retail.
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Studio SAP | 41610enUS (15/12)
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
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